Why should you know about the Housing Ecosystem? Why is it important?
The housing ecosystem, or housing continuum as it is also known, is a range of the different types of housing available in your community.
This range starts with situations where housing is not available, moves to emergency housing, and goes all the way to market-rate homeownership and represents the level of financial independence residents have within each available housing type. Each part of the housing ecosystem is meant to accommodate the current needs of its community’s residents.
When one part of the ecosystem doesn’t work – it hurts the rest. Let’s take a look at where you might fall in the housing ecosystem – and where Habitat stands in the big picture.
Homelessness a.k.a “The Street”
Four walls do not define this type of living situation, but it is most certainly a reality for many. Whether chronic or not, homelessness has become one of the greatest challenges our society faces today. For obvious reasons, homeless individuals and families face significant health and safety challenges day in and day out. Many cases of homelessness are caused by traumatic and sudden events that push someone outside of their home – including rent hikes and a loss of income. Many are just one crisis away from homelessness. Homelessness can come as a result of not having sufficient housing. In California – there is a shortage of over 3 million homes.
Many people use emergency shelters as a last resort, because they do not have a safe and stable roof over their heads. In some cases, individuals have been evicted, are dealing with a family dispute, or are seeking refuge from situations of domestic violence. Other times, individuals are transitioning after aging out of foster care, seeking short or long-term hospital care, and even incarceration. These shelters are limited short-term shelters meant to be used until individuals can find permanent housing. Those experiencing chronic homelessness often turn to emergency shelters as a long-term temporary solution.
Transitional housing is temporary lodging set up to transition residents into permanent, affordable housing that can also provide social support services. Forms of services can include security offerings for victims of domestic violence, transitional support from incarceration back into the community, and support for those attempting to overcome addictions.
Social housing consists of single room occupancies, public housing and nonprofit housing as well as units in which residents have rent subsidies like Section 8. Most social housing is on the older end and has not expanded significantly for quite some time. Section 8 rents provide landlords a portion of total tenant rent, but unfortunately, renters’ housing needs have significantly outpaced section 8 funding—further increasing our affordable housing shortage and long Section 8 waiting lists.
Affordable rentals can be public or privately owned or owned by a nonprofit. These units can be permanent supportive housing, full-size apartments, and in more recent cases, tiny homes and ADUs (accessory dwelling units).
This is where Habitat for Humanity lands along the spectrum. The reason why affordable homeownership is so successful is that it creates a lasting positive impact on the health, income, and overall well-being of individuals and families. This impact extends into other generations through wealth accumulation. According to the US Census Bureau, the average homeowner has a net-worth that is one hundred times greater than that of a renter: $200,000 for homeowners compared with $2,000 for renters. Affordable homeownership closes the gap between those without wealth and those with wealth. Down-payment programs in California like CalHome and WISH also help make affordable homeownership possible.
Market Rate Rental
Individuals or families with higher incomes not wishing to get into a permanent housing situation have the option of renting in market-rate housing. In these cases, landlords or property owners set the monthly rent. In many cases, however, rent exceeds the 30% income limit – often 50% or higher. In fact, the average rent in Los Angeles as of 2019 for a 2-bedroom apartment was $2,257. For an individual making $60,000 a year, that’s roughly 45% of their income. This leaves families vulnerable in a crisis situation where a sudden loss of income or emergency situation means choosing between paying for household essentials like food, and rent.
Market Rate Homeownership
The last group of the housing ecosystem is market-rate homeownership. This type of housing is purchased through a conventional loan, with no subsidies or assistance. The price of housing is often determined by different factors, like location, available local amenities, local schools, and overall area desirability. Some Habitat homeowners have transitioned into this type of housing thanks to the program’s ability to create generational wealth and increase individual purchasing power, leaving the vacant Habitat homes for other families in need.
A Harsh Reality of the Housing Ecosystem
There are many different kinds of housing within the housing ecosystem, and each meets needs a little differently. Some people move frequently between different kinds of housing, and others barely move at all. Inequities in housing have existed for decades. The black community has been forced to cope with these inequities, which is why for the most part, many are forced to remain in the lower end of the ecosystem. According to the U.S. Census Bureau, the Black homeownership rate is 40.6% as of July 2019, the lowest it’s been since 1950. Also reflective of these challenges – an Urban Institute study of 100 cities shows not even one has a black homeownership rate close to the white homeownership rate. This challenge is surmountable – but only when everyone is involved.
When housing is affordable, it creates opportunity and generational wealth – opening doors that seemed to be closed forever for working families and others living in poverty throughout the United States. Bright futures are possible, but it starts with a safe and stable home.
*The preceding information is based on the latest in housing information. This article will be updated periodically.